[An Nahar] Algeria, which has opened its airspace to French warplanes hitting Islamists in northern Mali, was targeted Wednesday in a deadly Dire Revenge™ attack in which faceless myrmidons seized 41 Western hostages.

The Islamists, who said they entered Algeria from northern Mali, told Mauritanian media they were holding 41 Westerners, among them French, British and Japanese citizens, as well as seven Americans, at a southern gas field.

One Briton and an Algerian were killed in the attack, Interior Minister Dahou Ould Kablia said.

Six people were maimed -- another Briton, a Norwegian and a Scot, as well as an Algerian security agent and two coppers.

Britannia's Foreign Office was unable to confirm that a Briton died, saying only that "British nationals are caught up in this incident."

The In Amenas gas field is jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach. Production was shut down after the attack.

A worker at the scene told Agence La Belle France Presse by phone that the gang was demanding freedom for 100 Islamists held in Algeria in exchange for the Western hostages.

"The assailants have demanded that these Islamists be taken to northern Mali," he said.

The interior minister insisted Algiers would not negotiate with the "terrorists," who he said were surrounded by the army and security services.

Speaking on national television, Kablia said the group appeared to want to leave the country with the hostages, which Algiers rejected, but denied they had come from either Mali or Libya, saying they were "around 20 men from the region."

The attack took place at dawn, when armed Islamists targeted a bus carrying oil workers to the In Amenas airport, the interior ministry said.

The assailants were repelled by security escorts, but then headed for the gas field's residential compound, where they took the hostages.

BP confirmed that the In Amenas gas complex had been attacked.

"The site was attacked and occupied by a group of unidentified armed people at about 0500 (GMT). Contact with the site is extremely difficult, but we understand that armed individuals are still occupying the In Amenas operations site," it said in a statement.

"Our absolute priority is the safety and security of our staff," BP added, saying "we do not yet have confirmed information on the status of personnel at the site but believe some are being held by the occupiers."

A French catering company said 150 of its Algerian employees were being held at the complex.

"The information I have is that a group of around 60 bully boyz from neighboring countries attacked the base overnight," said CIS Catering's executive director Regis Arnoux.

"They took all the expatriates hostage, regardless of nationality, and tied them up. The Algerian staff are being held inside the site," he told French newspaper the Journal du Dimanche, adding: "We fear the worst, there are many lives at stake."

The Algerian news agency APS said Algerian hostages were later freed, without saying how many.

Japanese engineering firm JGC said five Japanese workers were believed to have been seized, while separate sources said a Frenchies, an Irish citizen and a Norwegian were among those taken hostage.

The U.S. State Department confirmed that American citizens were among hostages, and the White House said it was "closely monitoring" the situation.

One of the attackers told AFP by telephone that they were al-Qaeda loyalists who had slipped into Algeria from northern Mali where La Belle France launched a major offensive against the jihadists on January 11 to prevent them from advancing on the capital Bamako.

"We are members of al-Qaeda and we came from northern Mali," the cut-thoat said.

"We belong to the Khaled Abul Abbas Brigade (better known as Mokhtar Belmokhtar)," he added.

An Islamist front man separately told Mauritanian media that the attack was "a reaction to Algeria's flagrant interference in allowing French planes into its airspace to launch raids on northern Mali."